What is healthy turnover?
Does turnover get a bad rap? Is all turnover bad? I'd say the answers are "kind of" and "absolutely not."
When you read articles about employee turnover, the focus is almost always on the costs produced and about how to reduce them, but estimates on the cost of turnover can vary widely, with some seeming outlandish. What's more, these articles rarely mention cost savings and other benefits associated with turnover. In addition, you can find tools on the web to calculate these costs, but none to calculate potential savings.
In fact, there are cost saving benefits associated with just about every additional cost related to turnover. For instance, you may have separation costs such as severance pay when an employee departs, but you will also save money by not having to pay them an annual bonus. Recruiting a new employee costs money, but you may be able to save money by hiring a replacement at a lower salary.
Vacancy cost, the cost associated with not having an employee available to perform work, is often cited in turnover articles, but there are also savings associated with vacancy. If overtime and/or temporary employees' costs while the position is vacant are less than the employee would have earned, a vacancy savings occurs. Of course, this often means that other employees are picking up the slack, and over time, this could negatively impact their performance and cause morale problems. In the short term, however, while you recruit to fill the vacancy, you may actually save money by not having to pay the missing employee's salary and benefits.
Furthermore, a vacancy provides an opportunity for a firm to upgrade staff. When an under-performing employee leaves, voluntarily or not, you have an opportunity to hire a more productive worker. If the new employee's performance and productivity exceeds the predecessor's, a net performance benefit results.
Other reasons that turnover is healthy and desirable in any organization are:
- If every employee stayed, and the organization continued to grow, everyone would be at the top of his or her pay scale, and salaries would be extremely high.
- Without some turnover, opportunities are rare for highly valued employees to be promoted, making it difficult for them to enhance their skills and abilities.
- New employees bring fresh experience, new insights, energy and ideas that drive creativity, progress, and innovation.
- New employees, often younger than those they replace, can typically be hired for less money, and having younger workers on the payroll can lead to significantly lower benefit premiums.
- Turnover is a means for improving the match between employees and their role in the right organization. Let's face it, despite everybody's best efforts, neither the employer nor the employee can be 100 percent certain that there's a good fit until at least several months after the hired employee starts working.
The point is that turnover creates benefits and opportunities as well as difficulties. The difficulties are fairly obvious, but focusing on the opportunities offers a more productive perspective that can give hiring managers the impetus to improve the firm's overall expertise and skills.
So, what is healthy turnover? When you replace an under-performing employee with a better one. Poor performers, because they can directly impact your bottom line by driving away customers, reducing productivity, and bringing down morale among co-workers, actually provide a net gain in the long run by leaving.
What is unhealthy turnover? When you lose a highly productive employee, particularly one with expertise in a growing specialty with high demand for talent. Since all employees are not created equal, committing valuable resources to try to retain all employees is counter-productive and not cost-effective.
Employees leave organizations for many reasons. Retirement, spouse relocation, pursuit of higher education, or becoming a full-time parent, are turnover instances that are usually not preventable. Other reasons for turnover such as ineffective managers, skills that don't match job requirements, and employees who don't embrace the values and culture of the organization may be preventable with proper training and better hiring and retention practices.
It's generally better to try to assist a slightly under-performing employee that is willing to put in extra effort to improve than to make a quick decision to let them go. A "green" employee that has a good attitude may only need some coaching and mentoring, along with a bit of seasoning, to raise his or her performance up to expected standards. A poor-performing employee who seems unlikely to be able to raise his or her performance, on the other hand, should be terminated sooner rather than later.
Organizations should strive to reduce unhealthy, preventable turnover by examining ways to improve recruiting, retention practices and training, but not be averse to a reasonable level of healthy turnover. To determine which type of turnover you have, don't relate your turnover to industry norms. Instead, compare your voluntary turnover to involuntary turnover and categorize each departure on the basis of whether it was good for the company. This exercise will help you get a handle on whether you have the right balance of healthy versus unhealthy turnover.
What do you think? Let us know.
Contact:
John P. Kreiss, President FOR
IMMEDIATE RELEASE
Tel.:
508-393-4933 ext. 17
Fax:
508-393-0076
E-mail: jkreiss@sullivankreiss.com
SULLIVANKREISS ANNOUNCES OPENING OF NEW
OFFICE
Executive Search Firm branching out to
Chicago July 1st
Northborough, Mass., June 19, 2006—Executive Search Firm,
SullivanKreiss, continues to expand with the announcement of its Chicago office
opening July 1.
The firm
has decided to expand its operations in order to better serve their Midwest and
West Coast clients. Kim McLean, the
Director of East Coast Operations, will assume control of the Northborough
Branch Office, while Justin Roy, the Director of Midwest Operations, will be
relocating to Chicago to assume leadership of the new office.
"We're
really happy to be in Chicago,” says John Kreiss, President and Founder of
SullivanKreiss. “It's a great city with a tremendous appreciation for
design and construction. We see our Midwest location as a great opportunity
to help our A/E/C clients become more successful by being their solution for
human capital."
“I’m
pleased to be making the move to Chicago, “ says Justin Roy, Director of
Midwest Operations. “I look forward to
continuing the success of SullivanKreiss.”
The new
offices will be located at:
125 S. Wacker Dr., Suite
300
Chicago, IL 60606
P: 312-893-5058
F: 312-893-5505
SullivanKreiss is a strategic ally to its clients by way of
its dedication solely to the building and design industry. Its expertise is in
identifying and recruiting top-notch technical and business development
personnel to fill critical positions for its clients.
If you’d like to hear more about this topic, or to schedule an interview,
please contact John Kreiss at 508-393-4933 ext. 17 or by e-mail at jkreiss@sullivankreiss.com
To sign up to receive the SullivanKreiss monthly
e-newsletter that offers insight into recruiting, employee retention, and other
human resources issues, visit www.sullivankreiss.com.
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SullivanKreiss opens Chicago office >>
Hot Candidates
Project Manager, PLS
Licensed Land Surveyor with 22 years of experience working with commercial and transportation projects. Experience with topographic mapping, boundary surveys, and right-of-way mapping. Base salary is $70K. Open to relocation.
For more information on this candidate, contact:
Emil Cwalinski
508-393-4933 ext. 18
ecwalinski@sullivankreiss.com
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|
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For more information on this candidate, contact:
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312-893-5058
jroy@sullivankreiss.com
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Project Manager, P.E.
Candidate has 25 years of extensive experience with project management for civil remediation work, and has overseen 120 people at one time. Manages business development, and brought in nearly $3 million in business over the past year. Candidate is a doctoral candidate, seeking a position that will offer greater challenge and responsibility. Current compensation is $120K.
For more information on these candidates, contact:
Tim Johnson
508-393-4933 ext. 14
tjohnson@sullivankreiss.com
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Principal Architect
Has over 25 years in the industry. Project experience includes commercial, residential, and industrial. Well-versed in all phases of the architectural process, and has business development experience. Registered and NCARB-certified. Familiar with AutoCAD, SketchUp, Microstation, Photoshop, Illustrator, Corel Draw, and MS Office Suite. Salary range is $90-100K.
For more information on these candidates, contact:
Kristin Griffiths
508-393-4933 ext. 16
kgriffiths@sullivankreiss.com
|
Senior Landscape Architect
Registered landscape architect with 11+ years of experience in private practice. He has been heavily involved with college and university projects as well as municipal parks, and corporate design. Familiar with project management, site design, master planning, estimating, construction documents and administration, grant writing, and zoning codes. Presently living in Ohio, but is willing to relocate for the right opportunity. Salary is $75K.
Senior Designer
Candidate is a senior designer with 10+ years of experience, predominantly in the corporate sector. She has extensive experience in conceptual design through construction documentation, finish selections, client presentations, coordination of project teams, and construction administration. Current salary is $80K.
For more information on this candidate, contact:
Jeff Simeone
508-393-4933 ext. 15
jsimeone@sullivankreiss.com
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One East Main Street, Suite 206, Northboro, MA 01532 (508) 393-4933 TEL (508) 393-0076 FAX |
edited by Peter
Fabris pfabris@peterfabris.com, http://www.peterfabris.com
formatted and sent by Bluewater Internet bob@bluewaterinternet.com, http://www.bluewaterinternet.com
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